We had a wonderful meeting today on a beautiful Sunday afternoon outdoors at La Madeleine! The conversation as always was a mixture of insight and humour. We had a total of 4 attendees: (from left to right) VJ Arjan, Andrew Whatley, Kevin Day, and Jeff Harrington.
The Day Scott Brown Took A Kennedy Seat
We debated the importance of the Obama-care bill passing in late March and whether this spells the strengthening or weakening of the majority Democratic party. Clearly, the fact that President Obama pulled this historic feat off is surely impressive. But there is immense backlash from the Conservatives and the consensus remains that November will lead to several defeats of incumbent Democratic candidates by the Republican rivals. The estimate ranges from anywhere between as little as 10 to as many as 50 seats in Congress.
What will happen to President Obama? Kevin Day believes that it is clear that he has seen the writing on the wall and will voluntarily choose not to re-run in 2012. He was told by a current Secretary of Commerce who was mortified by the Scott Brown election in
Social Security and Gambling
This past year was the first year in which Social Security paid out more than it took in. This, unfortunately, will be much more pronounced as more baby-boomers retire.
Interestingly enough, though this may be a very trying circumstance for the American taxpayers, this will be a godsend for gambling corporations. Some of its largest proceeds come from receivers of Social Security. Approximately 45% of recipients will “donate” some of their income to gambling.
The Scarlet Kings
VJ Arjan was reflecting on how much he has changed internally due to his association with the Scarlet Kings. One of the premises we all hold is that there is enough money to make; the idea of the abundance of money is a reality. VJ further remarked how this transformation has led to him receiving a relatively substantial bonus check (for a 23 year-old at least) from his workplace of around $11,000 for the month - a check he thought a few years ago would not have been attainable. It is remarkable how when one gathers together a group of similar minds how each mind rubs off on another. The attaining of riches becomes just that much easier.
Sandstorm Resources (SNDXF)
Sandstorm Resources seeks to complete transactions with companies that have advanced stage development projects or operating mines by making upfront payments to its partners. One such operating mine they recently acquired an interest is Santa Fe Gold Corporation (SFEG). In turn, Sandstorm Resources will receive royalties and payments in the form of production.
Crosstex Energy GP, L.P. (XTEX)
Jeff Harrington had a natural gas play in the form of a limited partnership. The good news about this form of partnership is that 90% of the net proceeds must be distributed to its shareholders, providing a very consistent and comparably high dividend yield.
AgFeed Industries (FEED)
VJ Arjan brought this agriculture play to the forum. AgFeed produces animal feeder foods and hogs in
Paladium
There was an incredible rise in the price of palladium over the past year as illustrated by the chart above. Kevin Day has been calling palladium for months now, and as in many other cases, he was right.
VJ Arjan recently discovered the story of this individual, which shows clearly how big “the market” really is. From the looks of it, you could never tell that this man would seem to act as smart as an 8th grader. You could also never tell that this individual is worth approximately $400 million. That is a staggering number to contemplate. And while we at the Scarlet Kings have been figuring ways to beat the smartest players in the world in the global markets and banging our heads against stock charts and balance sheets, this man has produced something that was clearly out of the box and become phenomenally rich. The lesson here is to remember how big the market really is.
Kevin Day’s Market Nose
For a brief part of the meeting we discussed the incredible accuracy of Kevin Day’s market plays, giving him a chance to do a little gloating with triumph also.
Here are some plays he has recommended over the couple years and how they turned out:
| Company Name | Ticker | Purchase Price | Current Price |
| North American Palladium | PAL | $3.50 | $4.75 |
| British Petroleum | BP | $38 | $60 |
| El Paso Gold | EL | $8 | $11 |
| Ford | F | $5 | $12 |
| Junior Gold Minors | GDXJ | $24 | $28 |
| Genworth Financial | GNW | $1 | $18 |
| Hecla Mining | HL | $4 | $6 |
Potential Short Plays
Jeff Harrington compiled a list of stocks that may very well go significantly lower from their current levels:
| Company Name | Ticker Symbol | Current Price |
| Blockbuster | BBI | $0.30 |
| Borders Group | BGP | $3.00 |
| Palm | PALM | $5.30 |
Simulated Portfolio
| Date | Security | Entry (Oct 08) | Current Price | Profit/Loss |
| | FXI (iShares FTSE/Xinhua | $25.16 | $44.59 | $1,943 |
| | ILF(iShares S&P Latin America 40 Index) | $26.60 | $49.78 | $2,318 |
| | EWZ(iShares MSCI | $37.69 | $75.45 | $3,776 |
| | PBJ(PowerShares Dynamic Food & Beverage) | $13.27 | $15.84 | $257 |
| | GUR (SPDR S&P Emerging | $29.74 | $47.52 | $1,778 |
| | FCX (Freeport-McMoRan Copper & Gold Inc.) | $29.06 | $85.67 | $5,661 |
| | WLT (Walter Industries – metallurgical coal) | $38.75 | $96.75 | $5,800 |
| | VALE (Companhia Vale do | $13.12 | $33.95 | $2,083 |
| | GVA (Granite Construction Inc.) | $35.67 | $31.08 | -$459 |
| | MT (Arcelor-Mittal ADR) | $26.25 | $45.78 | $1,953 |
The next meeting will be on
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